Online retailer James Hopkins is typical of the new breed of entrepreneurs turning around Australia's reputation as an e-commerce laggard.

By day the 36-year-old sells radio advertising for a major broadcaster. By night Mr Hopkins runs his own e-commerce business, sitting up into the wee hours ordering smart phone and tablet cases and accessories for his website, icoverlover.com.au.

"I had a media background and early in my career I worked in retail in a mobile phone business," says Mr Hopkins. "I decided to bring those two passions together and have a go at something else," he said.

Mr Hopkins has no plans to give up his day job, but the two-year-old business is growing so fast new premises will soon be in order. His wife, Lana, quit her job last year and now works full-time in the business as sales and marketing director.

Long considered an e-commerce laggard, Australia is now leading the world in the rate of growth in new online retail sites.

Bigcommerce, which builds e-commerce platforms for small- to medium-sized businesses such as Collette Dinnigan, Bettina Liano and boxer Danny Green, says the number of new retail stores in Australia rose 200 per cent between 2010 and 2012, compared with 46 per cent growth in the US and Canada and 79 per cent in the UK.

Bigcommerce founder Mitchell Harper says 48 per cent of the group's Australian e-commerce entrepreneurs are 'moonlighters," people building their online businesses in their free time.

He believes aspiring retailers are setting up e-commerce sites rather than bricks and mortar stores because of the high cost of rent and labour and declining foot traffic in high-streets and shopping malls.

"Foot traffic to retail stores is declining for all but Westfield and other major malls," he said. "If you think about Oxford Street in Sydney . . . half the stores are obsolete and all that foot ­traffic is now going to Westfield Bondi Junction or online," he says.

Australian consumers were also spending more online than consumers overseas. The average order in Australia has risen 20 per cent in two years to around $142, $26 higher than the average order overseas.

"We were late to the party," says Mr Harper. "Now consumers are comfortable buying online and merchants are seeing that trend and thinking about how do I get a piece of that."

"Now that more Australian retailers are online and have developed track records people are slowly spending more money because they've seen over the years the quality that's been delivered," says Mr Hopkins.